Telecommunication major AT&T (NYSE:T) declined in pre-market trading after its fourth-quarter earnings disappointed investors. The company reported Q4 adjusted earnings of $0.54 per share compared to $0.61 per share in the same period last year and fell short of consensus estimates of $0.56 per share.
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AT&T posted revenues of $32 billion in the fourth quarter, up by 2.2% year-over-year and above analysts’ forecasts of $31.5 billion. The company had postpaid wireless net additions of 526,000 in the fourth quarter, while postpaid phone-only average revenue per user (ARPU) was $56.23, up by 1.4% year-over-year.
Looking forward to FY24, the company has forecasted adjusted earnings in the range of $2.15 to $2.25 per share, below analysts’ expectations of $2.46 per share. This forecast includes accelerated depreciation of the equipment the company had procured from Nokia (NOK) as it shifts to a new technology called open radio access network (ORAN). AT&T expects FY24 free cash flow to be between $17 billion and $18 billion.
Is AT&T Stock a Buy or a Hold?
Analysts remain cautiously optimistic about T stock with a Moderate Buy consensus rating based on seven Buys, three Holds, and one Sell. Over the past year, AT&T stock has declined by more than 3%, and the average T price target of $19.90 implies an upside potential of 15.8% at current levels.
